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A joint venture is basically a tactical partnership in which two or more than two companies or individuals decides to put in products, services and capital to establish a commercial project.

The main key for success in joint venture in India is the compatibility and understanding between the contracting parties.

The associated parties must aim for a goal together and the conditions must be written in the clauses of Joint Venture Agreement. This can maintain the success of the collaboration in Indian scenario.

  • Two or more parties must have the intension of getting involved in a partnership or a venture.
  • Both the parties invest in the venture or according to the agreement.
  • Each party is assigned with duties and rights as per the partnership.
  • The terms of the agreement define the venture or the partnership that includes the agreement span and the share of the parties.

The two options available for establishing a joint venture in India are:

  • Contractual joint venture
  • Equity based joint venture

In case of a change in ownership, the FBO is mandated to file an FSSAI Food License Modification too. Along with that, the FBO will need to follow the Company Registration procedure as well.

Benefits of a Joint Venture

  • New insights and expertise
  • Better resources
  • It is only temporary
  • Both parties share the risks and costs
  • Joint ventures can be flexible
  • There are ways to exit a joint venture
  • You will know what’s yours and will be able to sell it
  • You are more likely to succeed
  • You will build relationships and networks
  • Your potential will virtually be limitless
  • You get to save money by sharing advertising and marketing costs
  • International joint venture eradicates the risk of discrimination

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In most jurisdictions a Joint Venture Agreement is legally binding. It can be used in court for seeking damages if either party consents on the terms of the contract.

Yes, Joint Venture is a contract and falls under the definition of a contract. It is a contract between two or more business entities for a fixed period of time. This contract binds a legal obligation to the members who entered in the contract in true and fair conscience.

Some of the following guidelines should be considered for inclusion while drafting a Joint Venture agreement.

  • The date in which the agreement is established
  • The members involved in the Venture
  • Business name of the Joint Venture
  • Description of the projects for which it was purposed for
  • Accounting and financing details.

A joint venture agreement can be terminated in the following ways:-

  • By way of will
  • By way of conduct
  • By way of words
  • By death of a party

If there is a mutual consent then the joint venture agreement can be terminat

A prominent book of account can help a joint venture by representing the true and fair view of its finances. It would also enable the parties to take better financial decisions. Prominent book-keeping would also help in maintain abnormal cash outflows and other mishaps.